Analyzing GreenTree Hospitality Group (NYSE:GHG) and First Watch Restaurant Group (NASDAQ:FWRG)

First Watch Restaurant Group (NASDAQ:FWRG) and GreenTree Hospitality Group (NYSE:GHG) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, valuation, institutional ownership, profitability, earnings and dividends.

Volatility & Risk

First Watch Restaurant Group has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500. Comparatively, GreenTree Hospitality Group has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500.

Earnings and Valuation

This table compares First Watch Restaurant Group and GreenTree Hospitality Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Watch Restaurant Group	$1.22 billion	0.51	$19.43 million	$0.29	34.97
GreenTree Hospitality Group	$1.01 billion	0.10	$23.85 million	$0.05	20.20

GreenTree Hospitality Group has lower revenue, but higher earnings than First Watch Restaurant Group. GreenTree Hospitality Group is trading at a lower price-to-earnings ratio than First Watch Restaurant Group, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

96.1% of First Watch Restaurant Group shares are owned by institutional investors. Comparatively, 8.1% of GreenTree Hospitality Group shares are owned by institutional investors. 6.1% of First Watch Restaurant Group shares are owned by company insiders. Comparatively, 88.7% of GreenTree Hospitality Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares First Watch Restaurant Group and GreenTree Hospitality Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Watch Restaurant Group	1.35%	2.85%	1.01%
GreenTree Hospitality Group	4.14%	2.49%	0.84%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for First Watch Restaurant Group and GreenTree Hospitality Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Watch Restaurant Group	1	1	8	1	2.82
GreenTree Hospitality Group	1	0	0	0	1.00

First Watch Restaurant Group currently has a consensus target price of $18.56, indicating a potential upside of 82.99%. Given First Watch Restaurant Group’s stronger consensus rating and higher probable upside, equities research analysts plainly believe First Watch Restaurant Group is more favorable than GreenTree Hospitality Group.

Summary

First Watch Restaurant Group beats GreenTree Hospitality Group on 12 of the 15 factors compared between the two stocks.

About First Watch Restaurant Group

First Watch Restaurant Group, Inc., through its subsidiaries, operates and franchises restaurants under the First Watch trade name in the United States. The company was formerly known as AI Fresh Super Holdco, Inc. and changed its name to First Watch Restaurant Group, Inc. in December 2019. First Watch Restaurant Group, Inc. was founded in 1983 and is based in Bradenton, Florida.

About GreenTree Hospitality Group

GreenTree Hospitality Group Ltd., through its subsidiaries, develops leased-and-operated, and franchised-and-managed hotels under the GreenTree Inns brand in the People's Republic of China. It also engages in investment holding activities; and provision of information technology services. The company was founded in 2004 and is headquartered in Shanghai, the People's Republic of China.